Ethanol potentiates the function of serotonin type 3 (5-HT3) receptor-channels in various types of neurons and several studies have suggested that the 5-HT3 receptor may be involved in alcohol preference and reward mechanisms. Previously, using a chimeric nicotinic-serotonergic receptor, we found evidence that alcohol and anesthetic effects on receptor function involve the extracellular N-terminal domain of the receptor (Mol Pharmacol 1996;50:1010-1016; Br J Pharmacol 1997;120:353-355). We are now studying the effect of single amino acid mutations in the N-terminal domain on the function and ethanol sensitivity of the 5-HT3 receptor. Recombinant wild-type (WT) & mutant 5-HT3 receptors were expressed in Xenopus oocytes and their function was studied using two-electrode voltage-clamp. We found that substitution of the arginine at amino acid 245 (R245) in the N-terminal domain of the 5-HT3 receptor with several other amino acids altered both the apparent agonist affinity and the ethanol sensitivity of the 5-HT3 receptor. The order of EC50 values of the 5-HT concentration-response curves was R245A < R245E < R245T < WT < R245K. On the other hand, the order of percentage potentiation by 100 or 200 mM ethanol was R245A > R245E > R245T > WT > R245K. The percentage potentiation by ethanol inversely correlates with the EC50 values of the 5-HT concentration-response curves, suggesting that mutation of R245 may affect ethanol sensitivity by altering the apparent agonist affinity of the receptor. Kinetic analysis of WT and R245A receptors expressed in HEK 293 cells, using whole-cell patch-clamp recording in combination with rapid extracellular solution exchange, revealed that the mutation greatly increased the rate of channel opening (activation) but did not affect the rate of channel closing (deactivation). In addition, for mutant receptors with F, I, Q, D or G at 245, ethanol (30-200 mM) directly activated inward current and the amplitude of that current correlates with the amplitude of outward current induced by MDL 72222 (100 nM), a 5-HT3 receptor antagonist. The observations suggest that amino acid 245 is involved in gating the 5-HT3 receptor-channel and thereby allosterically affects the ethanol sensitivity of the receptor.